Better outcomes for all: can new pricing models transform European patient care?

I am extremely excited by the promise of medical innovation. From across the life sciences sector we are seeing life changing, even life-saving, cutting-edge science being translated into real, tangible, often transformational outcomes for patients, for society, and for how we manage our healthcare.

Different therapies, including combination therapies, cell therapy, and gene editing, are making the previously untreatable, treatable, or even curable. This genuine, palpable excitement over the science and its potential for patients is often twinned with legitimate concerns about affordability and access.

Nathalie Moll EHFG | via European Health Forum Gastein 2017

Our health systems are facing unprecedented challenges from an ageing population and the increasing prevalence of chronic disease. To be very clear, it is the rising demand for healthcare services that is driving healthcare costs, and not the price of medicines. In fact, the latest independent data indicates that “over the next five years, net brand spending [on medicines] will remain flat, despite the expected entry of new, branded medicines; the overall impact on payers being the same in 2022 for brands as in 2017.” Medicines will be delivering more for less.

Even having established that the price of new medicines will not be the principle driver of healthcare costs, rising demand for healthcare means making some hard choices.

It means choosing to spend our resources on the interventions that make the most difference to patients and disinvesting in the ones that don’t. Decisions will need to be made based on the outcomes that interventions deliver and on their impact on the wider healthcare system and society. As medicines only account for around one fifth of total healthcare spending in Europe, applying outcomes-focused thinking to medicines alone will not be sufficient to ensure the long-term sustainability of our healthcare systems. That requires holistic, system-wide thinking — total healthcare spending optimization, including reduction of waste and low-value care across the system. And medicines, along with other technologies, have a role to play.

If we can make the transition to more outcomes-focused systems, industry has a role to play in working with payers, clinicians, and patients to establish more flexible and outcomes focused payment models that support the development of a sustainable, efficient, high-quality health care system that also rewards innovation. More flexible and innovative approaches to medicines pricing can also play a role in tackling health inequalities ensuring new treatments reach all citizens, regardless of where they work or live, or their personal wealth. It is an important signal that Europe takes access to innovation seriously.

This approach is not without risk for industry. If a product — or for that matter a healthcare service — does not deliver on its clinical promise, society should not continue to pay for it if there are other healthcare interventions that deliver more patient value for money.

Making decisions on healthcare spend, what we invest in, and perhaps more critically what we don’t, often rest on political considerations.

We believe that the long-term benefits outweigh the risks. In the end, it’s about paying for what we all ultimately want our health systems to deliver: good health outcomes for patients.

This isn’t about theory. It’s about practice, real examples in real healthcare settings. Where courageous healthcare leaders are reorienting their systems to holistically focus on the outcomes delivered, rather than just the inputs they have traditionally been measured on.

Integrated care organizations, such as Gesundes Kinzigtal in Germany or Ribera Salud in Spain, are taking holistic responsibility for the care of patients — from prevention to rehabilitation ­— and have been able to both create savings through lower costs and improve outcomes, such as lower mortality and reduced hospital readmissions. Financial incentives — where the provider gets to keep some of the money saved and is rewarded based on the final outcome rather than on the amount of health services produced — can be key catalysts to optimize care while optimizing expenditure.

Outcomes-based contracting is also more and more common for medicines, such as the Italian system for concluding Managed Entry Agreements for new oncology medicines, where the reimbursement is dependent on how patients actually respond to treatment. The system is based on a large number of web-based registries run by the Italian drug agency AIFA, where the treatment and response-rate of individual patients are tracked over time and is dependent on data infrastructure.

Other European countries are successfully using outcomes-based agreements to ensure value for patients and healthcare systems, even though it’s still the exception rather than the rule — a key factor being the supporting data infrastructure needed to enable such approaches.

If we really want our systems to be affordable now and sustainable in the future, then a system-wide focus on patient outcomes is quintessential.

Tracking outcomes is also easier to do for some therapies than others. Good candidates have been the new therapies for Hepatitis C, due to the relative ease of measuring the prevalence of the virus in patients and, as a result, outcomes-based models in this area have proliferated across Europe from the U.K. to Romania. In other cases, in particular more complex, chronic diseases, such as diabetes and Alzheimer’s, measuring outcomes is more complex and would require a combination of indicators, including Patient Reported Outcomes (PROMs) to measure quality of life and other values important for patients. Efforts to include PROMs in national health information systems, through initiatives such as the OECD PaRIS project, and public-private partnerships such as the IMI Big Data for Better Outcomes program, all contribute to improving the data environment needed for more outcomes-based systems.

Committing to change — Moving from experimentation to operating at scale

Making decisions on healthcare spend, what we invest in, and, perhaps more critically, what we don’t, often rest on political considerations. In the race to minimize cost, medicine is often seen as an easily identifiable, more “politically correct” target than other elements of healthcare to which the electorate has a greater emotional attachment.

To do things differently, to really bring a new lens, we need to shake off any political shackles, center decisions on one thing, the one thing that really counts — how can we deliver more for patients for the same investment or even for less? If we really want our systems to be affordable now and sustainable in the future, then a system-wide focus on patient outcomes is quintessential.

As an industry, we are ready to work with governments, patient groups, healthcare professional associations, and all relevant stakeholders across Europe to help accelerate the development of outcomes-focused pricing models at a national level. This comes with a commitment to respond to the challenges of affordability and to move towards outcomes-focused payment models as part of our aim to be a trusted partner in the delivery of improved health outcomes.